Stocks and Precious Metals Charts – Nativity

“American politics have rarely presented a more disheartening spectacle. The repellent and dangerous antics of Donald Trump are troubling enough, but so is the Democratic Party leadership’s failure to take in the significance of the 2016 election campaign. Bernie Sanders’s challenge to Hillary Clinton, combined with Trump’s triumph, revealed the breadth of popular anger at politics as usual – the blend of neoliberal domestic policy and interventionist foreign policy that constitutes consensus in Washington.
Neoliberals celebrate market utility as the sole criterion of worth; interventionists exalt military adventure abroad as a means of fighting evil in order to secure global progress. Both agendas have proved calamitous for most Americans.
Many registered their disaffection in 2016. Sanders is a social democrat and Trump a demagogic mountebank, but their campaigns underscored a widespread repudiation of the Washington consensus. For about a week after the election, pundits discussed the possibility of a more capacious Democratic strategy. It appeared that the party might learn something from Clinton’s defeat. Then everything changed.”
Jackson Lears, What We Don’t Talk About When We Talk About Russian Hacking, London Review of Books
Stocks wobbled sideways, sliding out stealthily on light volumes, into the new year.
Gold and silver managed to extend their rally off the NfP-FOMC short term bottom.

This post was published at Jesses Crossroads Cafe on 27 DECEMBER 2017.

Stocks and Precious Metals Charts – Quiet Comex Option Expiration – Bitcoin, the Mania

The rebound for gold and silver off the lows associated with the recent Non-Farm Payrolls and FOMC continued with gold taking and holding 1280 and silver putting a stick in the ground above 16.50. I lightened up on a largish short term position I had put on at the time. I did circle these instances of short term lows on the chart as you may recall.
As noted with the publication of the new Comex options calendars yesterday, today was an options expiration for precious metals.
February is the new active month for gold contracts. March is the next active contract for silver.
Although it still matters for pricing, the Comex listed warehouse complex is starting to resemble a museum. Very little gold flows in or out of its approved warehouses, excepting for those in Hong Kong which is by far their largest source of physical gold movement.
Silver is a bit different, because CNT is an active wholesaler of physical silver for the Mint among others, and it uses the Comex to warehouse its inventory flows. But I just don’t see the shortage of physical silver in the same light as gold. It is easy to see that JPM is sitting on a massive hoard which is interesting.
Gold is a funny market now. In some ways it reminds me of a ponzi scheme in which a relatively small amount of free float physical gold is being leveraged over a very large and growing number of commitments.

This post was published at Jesses Crossroads Cafe on 26 DECEMBER 2017.

Market Report: Outlook for gold – 2018

Regular readers of these market reports will have not been surprised by the sell-off this week ahead of the FOMC’s quarter point rate increase. It took silver into a loss on the year so far in dollars, as our headline chart shows, and gold’s net rise to less than 8%.
Gold and silver recovered their losses on the week following the dollar rate increase, and in early European trade this morning, gold had risen a net $8.50 to $1257, and silver by five cents to $15.93 from last Friday’s close. Measured in the other major currencies, gold is not looking so pretty, as the next chart shows.

This post was published at GoldMoney on December 15, 2017.

Gold Bullish on Fed Hike 2

Gold has been battered lower in recent months as gold-futures speculators fled in dread of the Fed-rate-hike boogeyman. As universally expected, the Fed’s 5th rate hike of this cycle indeed came to pass this week. When gold didn’t collapse as irrationally feared, the cowering futures traders were quick to start returning. Past Fed rate hikes have actually proven very bullish for gold, and this latest one will be no exception.
Back in early September, gold was sitting pretty near $1348. It had rallied dramatically out of its usual summer-doldrums low in its typical major autumn rally, blasting 11.2% higher in just 2.0 months. But even way back then, Fed-rate-hike fears for the FOMC’s December 13th meeting started creeping in. When gold peaked on September 7th, federal-funds futures implied December rate-hike odds running just 32%.
Over the next 8 trading days leading into the September 20th FOMC meeting where the Fed birthed its unprecedented quantitative-tightening campaign, those rate-hike odds climbed as high as 62%. That day’s FOMC statement and subsequent Janet Yellen press conference blasted the December rate-hike odds even higher to 73%. So gold slumped back down to $1300 as futures speculators sold in trepidation.
By early October as these futures-implied rate-hike odds hit 93%, gold fell as low as $1268. Over the mere one-month span where December rate-hike odds nearly tripled from 32% to 93%, gold dropped 5.9% on heavy spec gold-futures selling. That erased nearly 6/10ths of its autumn rally, which really weighed on sentiment. Gold still managed to stabilize around the $1280s in late October and November.

This post was published at ZEAL LLC on December 15, 2017.

Year-end Rate Hike Once Again Proves To Be Launchpad For Gold Price

Year-end rate hike once again proves to be launchpad for gold price
– FOMC follows through on much anticipated rate-hike of 0.25%
– Spot gold responds by heading for biggest gain in three weeks, rising by over 1%
– Final meeting for Federal Reserve Chair Janet Yellen
– Yellen does not expect Trump’s tax-cut package to result in significant, strong growth for US economy
– No concern for bitcoin which ‘plays a very small role in the payment system’
There were few surprises yesterday when the Federal Reserve decided to hike rates for the third time this year, by 0.25% to 1.5%. Gold responded with a climb of over 1%.
The statement accompanying the announcement was cautiously optimistic. Two FOMC members dissented whilst Yellen gave comments on Trump’s much lauded tax package and bitcoin.
This was Yellen’s last FOMC announcement as Federal Reserve Chair. As has become her style she was communicative of the Fed’s upcoming plans in terms of normalising monetary policy and the three rate hikes intended for 2018.

This post was published at Gold Core on 14, December.